#junk fees

23 01, 2024

OVERDRAFT12

2024-01-23T12:13:12-05:00January 23rd, 2024|1- Financial Services Management|

Overdraft Fees

Building on a bulletin and circular from late 2022 warning banks about certain overdraft practices, the CFPB has now proposed a rule that would sharply and expressly limit fees for extensions of credit related to overdrawn transaction accounts unless the account comes under an array of consumer-protection requirements.  Part of the Administration’s campaign against “junk fees,” the proposal sets a “break-even threshold based on a bank’s costs” and provides for an alternative break-even benchmark CFPB-set fee that would allow a lender to avoid costly additional regulatory requirements, expanding the Bureau’s recent focus on mandating industry pricing evident in its controversial proposal on credit-card late fees.  Lines of credit and ready access to credit-card credit associated with overdrafts would also come under new limits and come under additional consumer-protection standards.

OVERDRAFT12.pdf

17 01, 2024

DAILY011724

2024-01-17T16:21:16-05:00January 17th, 2024|2- Daily Briefing|

CFPB Tries to Bring Overdraft Fees Under New Benchmark

Arguing that overdraft fees are a big-bank “junk-fee harvesting machine,” CFPB Director Chopra today released a long-awaited proposal to cap fees to what the agency considers a reasonable threshold.

Bowman Expands Basel Critique, Key Dem Now Points to Problems

In remarks today, FRB Gov. Bowman did not go quite as far as her colleague Chris Waller yesterday, but she nonetheless urged that the end-game rules be re-proposed after comments are taken into account.

Senate Banking GOP Again Urges Capital Proposal Withdrawal

Senate Banking Ranking Member Scott (R-SC) along with all Committee Republicans late yesterday sent a letter to FRB Chair Powell, FDIC Chairman Gruenberg, and Acting Comptroller Hsu once again calling on the regulators to withdraw the capital proposal (see FSM Report CAPITAL230).

Biden, Brown Praise CFPB Overdraft Proposal

Following the CFPB’s announcement of its proposed rule regarding overdraft fees today, President Biden again denounced “junk fees” as “exploitation,” and included the CFPB’s proposal in his administration’s efforts to lower costs for American consumers.

FRB/FDIC Provide Limited-Time Resolution-Plan Filing Flexibility

Reflecting a problem we identified in our assessment of the resolution-plan proposal (see FSM Report LIVINGWILL22), the FRB and FDIC today extended the resolution plan submission deadline for categories II and III banks from July 1, 2024 to March 31, 2025.

Global Regulators Turn to OTC-Derivative Margin Improvement

Following yesterday’s release with the CPMI focused on CCPs and clearing members, the Basel Committee and IOSCO today …

10 01, 2024

DAILY011024

2024-01-10T17:00:41-05:00January 10th, 2024|2- Daily Briefing|

HFSC’s HUD Hearing to Trod Partisan Ground

HFSC’s majority staff memo on Thursday’s hearing with HUD Secretary Fudge makes it still clearer that the session will focus on affordable housing, homelessness, and public-housing agencies in cities such as New York and Washington, D.C.

HFSC GOP Slams DOL Fiduciary Rule

At today’s HFSC Capital Markets Subcommittee hearing on the DOL’s Fiduciary Rule, Subcommittee Chairwoman Wagner (R-MO) argued that the proposal should be withdrawn, calling it a partisan effort to eliminate “junk fees.”

HFSC Takes Partisan Approach to FSOC

At today’s HFSC Digital Assets Subcommittee hearing on FSOC’s systemic-designation framework (see FSM Report SYSTEMIC98), Subcommittee Chairman Hill (R-AR) questioned FSOC’s approach to addressing systemic risk, claiming that the Council’s revised guidance is vulnerable to abuse and unintended consequences.

CFPB Small-Business Reg Survives

Senate Republicans tried today to override the President’s veto of the Congressional Review Act resolution approved by both Houses of Congress to repeal the CFPB’s small-business reporting rule.

Daily011024.pdf

31 10, 2023

DAILY103123

2023-10-31T17:02:58-04:00October 31st, 2023|2- Daily Briefing|

HFSC GOP Turns to Merger-Policy Demands

Financial Institutions Subcommittee Chair Barr (R-KY) and Rep. Fitzgerald (R-WI) last night sent the federal banking-agency heads a stiff letter demanding to know when they plan finally to issue the long-promised bank-merger policy following public notice and comment.

China Leads New BIS CBDC Pilot

In a new CBDC project sponsored by the BIS’s Innovation Hub, central banks either directly associated with China or within its ambit will focus on multi-CBDC wholesale cross-border payments.

White House, Labor Turn to Retirement Advice “Junk Fees”

Building on its “junk-fee” initiative, the White House today expanded Obama-era “best-interest” standards to retirement advisers to close what it believes are loopholes in the SEC’s jurisdiction under its broker-dealer best-interest standard.

BIS CPMI: Even Sound Stablecoins May Not Be Worth the Effort

A new report from the BIS Committee on Payments and Market Infrastructures finds that properly designed and regulated stablecoins could improve cross-border payments by increasing speed and transparency while lowering costs, especially in emerging markets and developing economies.

GAO Vacates Key SEC Crypto Ruling

The GAO today released a report finding that the SEC’s staff accounting bulletin (SAB) 121 is a rule subject to the Congressional Review Act, throwing a key Gensler anti-crypto ruling into immediate ineffectiveness and an uncertain future.

Daily103123.pdf

11 10, 2023

DAILY101123

2023-10-11T16:47:36-04:00October 11th, 2023|2- Daily Briefing|

Bowman Targets U.S. Leverage Ratio, NBFIs

In remarks during the Morocco IMF/Bank meeting today, FRB Gov. Bowman contrasted U.S. bank resilience with the IMF’s findings yesterday on potential vulnerabilities as rates rise and macroeconomic conditions soften.

FSB Reiterates Stability Concerns

The FSB’s latest work plan reiterates all it most recently said to the G20.

CFPB Barrels Down on “Basic” Banking Fees

In conjunction with a new White-House junk-fee initiative, the CFPB today issued “guidance” – i.e., essentially a final rule – banning large banks and credit unions from collecting “unreasonable” fees for what the Bureau considers reasonable and “basic” account information.

SEC Throws Wrench into TLAC Standards

As we noted yesterday, the FSB’s assessment of the global resolution framework’s effectiveness found significant glitches it urges national regulators quickly to address via standards such as those now pending in the U.S. to bring smaller banking organizations into the resolution-planning regime (see FSM Report LIVINGWILL23).

OFR Study: Short-Selling Does Not Harm Financial Stability

OFR today released a model-based study that finds no evidence that short-selling adversely affects financial stability.

Daily101123.pdf

18 09, 2023

DAILY091823

2023-09-18T16:46:46-04:00September 18th, 2023|2- Daily Briefing|

Dems Slam Fed Climate Scenarios

Sens. Markey (D-MA), Warren (D-MA), Sanders (I-VT) and eight additional Democratic Senators and House Members sent a letter to Chair Powell today demanding that the Fed ensures that the financial institutions it oversees properly address the threat of climate change.  Claiming that the Fed’s climate pilot scenarios are not sufficiently rigorous, the letter demands that the Fed require banks to submit and execute plans to align their activities with climate targets, such as reducing financed emissions.

Top Treasury Official Sounds Big-Tech Payments Alarm

Treasury Assistant Secretary for Financial Institutions Graham Steele Friday warned that Big-Tech firms’ entry into financial services could result in increased market concentration and predatory pricing, highlighting their ability to leverage existing commercial relationships as well as network effects.  Mr. Steele also named consumer-data rights and junk fees as top priorities, praising the CFPB’s actions on personal data (see FSM Report DATA3) and credit-card late fees (see FSM Report CREDITCARD36).

Daily091823.pdf

26 07, 2023

DAILY072623

2023-07-26T16:37:20-04:00July 26th, 2023|2- Daily Briefing|

Senate Democrats Stand Firm On “Junk Fee” Campaign

Today’s lightly-attended Senate Banking Financial Institutions Subcommittee hearing on banking and consumer fees showcased broad Democratic alignment with the Administration’s “junk fees” campaign and persistent Republican aversion to this effort as well as to the CFPB.

CFPB Flags UDAAP, Other Problematic Practices for Enforcement

The CFPB’s latest supervisory report not only details recent actions and priorities, but also expressly stipulates that certain activities identified in the course of supervision that have yet to be addressed by formal agency action are UDAAP.

SEC Targets AI Advice

Acting as anticipated following Gary Gensler’s fiery talk last week about AI risk, the SEC today voted 3-2 to propose new rules curtailing what it believes to be broker dealer and investment-adviser conflicts of interest due to predictive analytics.

Crypto-Jurisdiction Bill to Advance; Stablecoin Measure Likely to do so Tomorrow

Chairman McHenry (R-NC) and Ranking Member Waters (D-CA) announced at today’s HFSC markup that bipartisan negotiations on the committee’s stablecoin bill continue and despite the absence of any breakthrough.

DOJ Officials Seeks Merger Answers

In remarks today, Policy Director David Lawrence of DOJ’s Antitrust Division went beyond new, draft DOJ/FTC merger guidelines (see FSM Report MERGER12) to lay out questions on which the agencies particularly seek answers.

Powell Stresses Bank Discount Window Readiness

FRB Chairman Powell’s press conference today focused almost entirely on monetary policy, but the chair agreed that the discount window performed badly during the recent crisis and that banks need to …

19 07, 2023

DAILY071923

2023-07-19T16:57:05-04:00July 19th, 2023|2- Daily Briefing|

FTC/DOJ Propose Sweeping M&A Rewrite

Following an extensive inquiry into a new U.S. merger construct, the Department of Justice and Federal Trade Commission today released a draft formal policy statement that would codify issues previously raised in areas such as a transaction’s implications for workers.

White House Leaves Bank “Junk Fee” Attack As Is

Acting on President Biden’s competition executive order (see Client Report MERGER6), the White House today announced a slate of actions aimed at lowering consumer costs and promoting competition.

Bipartisan Senators Introduce New DeFi-AML/Sanctions Framework

Senator Reed (D-RI) yesterday introduced legislation along with Sens. Warner (D-VA), Rounds (R-SD), and Romney (R-UT) targeting DeFi-related money laundering and sanctions evasion.

Dems Reintroduce Bill Requiring Instant Consumer Deposit Access

Sens. Van Hollen (D-MD) and Warren (D-MA) and Reps. Pressley (D-MA) and Lynch (D-MA) have reintroduced the Payments Modernization Act, which requires financial institutions to recognize deposited funds in real-time and clarifies the moot point of whether the Fed has existing authority to build a real-time payments system.

Daily071923.pdf

7 07, 2023

DAILY070723

2023-07-07T16:47:33-04:00July 7th, 2023|2- Daily Briefing|

House Judiciary Joins GOP Asset-Manager ESG Attack

Continuing the GOP campaign against ESG, House Judiciary Chairman Jordan (R-OH) and Reps. Massie (R-KY) and Bishop (R-NC) sent letters late yesterday to the leadership of BlackRock, Vanguard, State Street Global Advisers, the Glasgow Financial Alliance for Net Zero, and the Net Zero Asset Managers initiative, claiming that what they call “collusive agreements” violate antitrust law.

FRB-KC: Farm Credit System Mergers May Influence Ag-Bank Portfolio Strategy

New research from Federal Reserve Bank of Kansas City staff concludes that, while Farm Credit System mergers over the past twenty years had relatively minor effects on agricultural-bank profitability and efficiency, they may have altered bank portfolio decisions with broader implications both for banks and the communities they serve.

CFPB, Treasury, HHS Launch Interagency Inquiry Into Medical-Payment Products

As part of the White House initiative to address medical-sector “junk fees” and consumer protection, the CFPB today was joined by HHS and Treasury in issuing an RFI on high-cost specialty financial products it says harm medical patients by driving up debt.

FHFA Joins Repeat-Offender Crackdown

Acting on the “repeat-offender” crackdown initiated by the CFPB and recently picked up by the OCC, FHFA today issued a proposed rule that would revise its Suspended Counterparty Program (SCP) regulation to authorize FHFA to immediately suspend business between the GSEs and counterparties who are found to have committed civil or criminal misconduct in connection with real property management or ownership.

Daily070723.pdf

28 06, 2023

DAILY062823

2023-06-28T17:21:14-04:00June 28th, 2023|2- Daily Briefing|

Biden Predicts End to Overdrafts

In a speech today detailing “Bidenomics”, President Biden continued his administration’s campaign against “junk fees,” specifically targeting overdrafts.

Fed Branch Approval Faced Unusual Bowman Protest

With a cryptic statement, FRB Gov. Bowman has taken the unusual step of protesting a branch application which she and all other governors approved.  The issue appears to be the fact that two commenters objected to the branch application on grounds that the bank (Vantage in Texas) discriminates against African American borrowers.  The Fed’s formal approval notes only these comments and otherwise approves of the bank’s fair-lending record, also noting its satisfactory CRA rating and the fact that the bank is principally a commercial lender.

Fed Finds Big Banks Resilient, Still Wants More Rules

The Fed’s stress-test release today attempts to meld both the Board’s finding that banks are not only resilient, but also “well-positioned” for a severe recession with Vice Chairman Barr’s plans to rewrite an array of new rules (see Client Report FEDERALRESERVE72) that stress tests are only one measure of strength the “resilient” evidence itself.

Daily062823.pdf

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